Dhanuka Realty Ltd Management Discussions

INDUSTRY OVERVIEW

India is a developing economy with a large population. The desired economic growth requires continuous investments in new infrastructure, new/large/small cities, machinery and production to employ more people and drive the economy forward.

The Indian real estate sector is one of the most globally recognized sectors comprising four sub sectors housing/ residential, retail, hospitality and commercial. The urban and semi-urban accommodations have a strong influence on the growth of the sector. In India, the real estate sector is the second-highest employment generator, after the agriculture sector

BUSINESS OVERVIEW

Your company is a reputed and well-known Jaipur based Company having its presence in construction services industry, since many years. Your Company was incorporated as “Sunshine Buildmart Private Limited” on January 18, 2008 under the provisions of Companies Act, 1956 with Registrar of Companies, Jaipur, Rajasthan. The name of your company was changed to “Dhanuka Realty Private limited” vide a fresh certificate of Incorporation dated July 11, 2016. Subsequently, your company was converted into a Public Limited Company and name of your company was changed to “Dhanuka Realty Limited” vide fresh certificate of incorporation dated August 17, 2016.

Your Company is real estate development and Construction Company primarily focusing on development of residential apartments in Jaipur. Your Company is a part of Dhanuka Group, which is engaged in building residential projects in Jaipur for more than a decade.

OVERVIEW OF REAL ESTATE AND HOUSING SECTOR

The real estate sector is one of the most globally recognized sectors. In India, real estate is the second largest employer after agriculture and is slated to grow at 30 percent over the next decade.

The real estate sector comprises four sub sectors- housing, retail, hospitality and commercial. The growth of this sector is well complemented by the growth of the corporate environment and the demand for office space as well as urban and semi- urban accommodations.

The construction industry ranks third among the 14 major sectors in terms of direct, indirect and induced effects in all sectors of the economy. There is immense potential for residential real estate in India.

Our Strengths

Strong Presence in Jaipur.

Well-known Brand Image and reputation. Focus on Quality Construction.

Well qualified and Experienced Management team. Cordial relationship between management and labour.

Factors Affecting our Results of Operation

General economic and demographic conditions.

Demonetization.

The condition and performance of the property market with overall sentiment being subdued and lack lustre.

Changes Regulations affecting the real estate industry especially the Real Estate (Regulation and Development) Act 2016 and GST.

Our ability to identify suitable projects and execute them in timely and cost-effective manner.

The availability of finance on favourable terms and low cost for our business and for our customer.

Growing Competition.

Segment-wise/product-wise sales performance

The Company is engaged primarily in the business of launching multiple Residential Projects and accordingly there are no separate reportable segments. Companys Turnover for the current financial year 2023-24 is Rs. 146.01 lakhs and Standalone total Profit after tax for the current financial year 2023-24 is Rs. (12.29) lakhs.

OPPORTUNITIES

Your Company expects demand from the mid income and affordable residential segment to improve as we believe there is significant demand in this category across the country. Increasing disposable incomes, rapid urbanization and strong demographics are some of the trends favoring the mid income and affordable residential market. There is a strong upturn in the commercial real estate sector also and the company has already initiated its first commercial project.

THREATS & CHALLENGES

Unfavorable changes in government policies and the regulatory environment can adversely impact the performance of the sector. There are substantial procedural delays with regards to land acquisition land use project launches and construction approvals. Retrospective policy changes and regulatory bottlenecks may impact profitability and affect the attractiveness of the sector and companies operating within the sector.

FINANCIAL AND OPERATIONAL HIGHLIGHTS

Your Companys total Profit after tax for the financial year 2023-24 is Rs. (12.29) lakhs as compared to profit after tax for the previous financial year being Rs. (151.39) lakhs.

Your Company is working on project Sunshine Aditya and has taken a project of GAIL

India Limited for the construction of boundary walls.

OUTLOOK

The real estate sector is on the cusp of a recovery supported by an improvement in macroeconomic fundamentals and policy environment. The combination of strong sales, weak market conditions that support rapid business development and a strengthening commercial market provide us with a great opportunity to generate strong free cash flows and disproportionately scale our business in Financial Year 2023-24. Our performance for the year underlines the effectiveness of our resilient and differentiated business model that is anchored by the strength of the Dhanuka brand and the ability that gives us to attract partners and customers across. Our presence in Jaipur is strong brand equity and large numbers of new projects leave us in a good position to capitalize on this opportunity in the year ahead.

INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY

The Companies Act, 2013 re-emphasizes the need for an effective Internal Financial Control system in the Company. The system should be designed and operated effectively. Rule 8(5)(viii) of Companies (Accounts) Rules, 2014 requires the information regarding adequacy of Internal Financial Controls with reference to the financial statements to be disclosed in the Boards report.

The Companys internal control system is commensurate with the nature, size and complexities of operations. Adequate records and documents are maintained as required by laws. The company has established well defined polices and processes across the organization covering the major avidities. The Companys audit Committee reviewed the internal control system on an ongoing basis keeping in mind the growth prospects and ever evolving business environment. Audit committee reviews proper implementation of corrective measures. All efforts are being made to make the internal control systems more effective.

To ensure effective Internal Financial Controls the Company has laid down the following measures:

All legal and statutory compliances are ensured on a monthly basis. Non-compliance, if any, is seriously taken by the management and corrective actions are taken immediately. Any amendment is regularly updated by internal as well as external agencies in the system.

Approval of all transactions is ensured through a pre-approved Delegation of Authority Schedule which is reviewed periodically by the management.

The Company follows a robust internal audit process. Transaction audits are conducted regularly to ensure accuracy of financial reporting, safeguard and protection of all the assets. Fixed Asset verification of assets is done on an annual basis.

RISKS AND CONCERNS

Every business has both Risk and Return and they are inseparable. As a responsible management, the Companys principal endeavor is to maximize returns. The Company continues to take all steps necessary to minimize its expenses through detailed studies and interaction with experts. Our senior management identifies and monitors the risk on regular basis and evolves process and system to control and minimize it. With regular check and evaluation business risk can be forecasted to the maximum extent and thus corrective measures can be taken in time.

FINANCIAL PERFORMANCE & OPERATIONAL PERFORMANCE:

A. FINANCIAL CONDITION:

Capital Structure:

The Paid-up Share Capital of the Company as on 31st March, 2024 is Rs. 7,74,00,400 divided into 77,40,040 Equity Shares of Rs. 10/- each fully paid up.

During the year the Company has not transfer any amount to Capital Reserve.

Fixed Assets:

During the financial year 2023-24, fixed assets were 0.05 lakhs.

Sundry Debtors:

Sundry debtors are 52.26 lakhs as on 31st March, 2024 as against NIL debtors in the previous financial year.

Cash and Bank Balances:

Cash and Bank balances stood to Rs. 11.14 lakhs as against Rs. 0.19 lakhs in the previous year.

Loans and Advances:

Long Term Loans and Advances is Nil in Current Financial Year as against NIL in previous year. Short Term Loans and Advances is Rs121.24 lakhs as against Rs. 333.38 lakhs in the previous financial year.

Current Liabilities:

Current Liabilities as on 31st March, 2024 is Rs. 884.54 lakhs as against Rs. 967.89 lakhs in the previous Financial Year.

B. OPERATIONAL RESULTS

Turnover:

During the financial year 2023-24 the turnover of the Company was Rs. 146.01 lakhs and income from other sources as on 31st March, 2024 was 120.65 lakhs, as compared to the turnover of the company on 31st March, 2023 as 221.18 lakhs and income from other sources was Rs. 3.36 lakhs in the previous financial year.

Depreciation:

The Company has provided for depreciation of Rs. 0.664 lakhs during the financial year 2023-24 whereas depreciation of Rs. 0.832 lakhs was provided in the previous financial year.

Tax Expenses:

The Company has provided for tax expenses of Rs. 3.70 lakhs in the financial year 2023-24 whereas in the previous financial year company had provided for tax expenses of Rs. 49.84 lakhs.

Net Profit:

The Net Profit of the Company after tax is Rs. (12.29) lakhs for the Financial Year 2023-24 as compared to Rs. (151.39) lakhs in the previous financial year.

Earnings per Share:

The Earnings per Share of the Company as on 31st March, 2024 is Rs.(0.16) per share for Face Value of Rs. 10/- as against Rs. (1.95) per share for Face Value of Rs. 10/- in the previous financial year.

HUMAN RESOURCES

Management is doing successfully in building experienced team and nurturing them to be leaders. The main motive of the company is trust, integrity, teamwork, innovation, performance and partnership. Various Departments are headed by Professional Qualified Personal, helping our business to remain competitive, achieve greater success and newer milestone.

DETAILS OF SIGNIFICANT CHANGES IN KEY FINANCIAL RATIOS, ALONG WITH DETAILED EXPLANATIONS

A detail of significant changes in key financial ratios, along with detailed explanations is as follows:

	BY ORDER OF BOARD OF DIRECTORS
	FOR DHANUKA REALTY LIMITED
Place: Jaipur
Date: 06/09/2024
	Sd-	Sd-
	Yogesh Dhanuka	Aditya Malpani
	DIN: 01437705	DIN:06428810
	(Managing Director	(Whole-Time Director
	& Chairman)	& CFO)